Logbook Loans: Weighing the Pros and Cons

If you were thinking of applying for a logbook loan, it would help to consider the pros and cons before you make a decision. Like other types of loans, the financial product has its good points but it’s not always suitable for everyone. To help you make the right decision, here are some points to keep in mind:

What are the advantages with logbook loans?

When it comes to bad credit loan options, logbook loans top the list because of the following advantages:

Same-day approval - In the spirit of competition, most lenders are now offering same-day approval logbook loans. If you’re really in need of quick cash, you don’t have to struggle or wait anymore. As long as you meet the requirements and have the documents ready, you can get approved for a logbook loan in 24 hours or less.

Minimal requirements - Unlike other secured loans, requirements are minimal with logbook loans. You just need to be of legal age and a UK resident. But most importantly, you must be a vehicle owner. If you’re willing to secure your loan against your vehicle, you can avail a logbook loan even if you have bad credit.

No credit checks - One of the reasons why borrowers are easily lured to logbook loans is because of the no credit check assessment. Lenders do not need to investigate your credit rating. If you meet the eligibility criteria, you are welcome to apply and get approved within the same day.

Large loan offers - Unlike unsecured loans, logbook loans can offer a more generous loan amount. With your vehicle as security, you can borrow between £500 and £25,000 or up to 50% of your vehicle’s official trade value.

What are the disadvantages of logbook loans?

Like other types of loans, logbook loans are not without some disadvantages. A couple of major downsides associated with this loan include:

High interest rates - Because logbook loans are a type of a bad credit loan, it follows that the interest rates will be hefty. Your lender may not run a credit check but the fact that you have a poor credit score can affect your loan’s cost. In general, logbook loans are advertised with a representative APR of 400% on average. Click here to know more about how APR affects your loan’s cost.

Risk of vehicle repossession - Vehicle repossession is the biggest risk you’ll take with a logbook loan. If you miss a few monthly payments, you may lose your vehicle to repossession.

Is a logbook loan for you?

Now that you know the pros and cons, it should be easier to decide whether a logbook loan is for you or not. If you do proceed to apply for this type of loan, make sure to plan ahead to avoid the risk of vehicle repossession.